Retail in Asia

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Vietnam: Rise in retail centres for 2010

A change in consumption habits and high growth of retail sales are painting a promising picture of retail centre construction investment in Vietnam.

As of January 1, 2010, trading expansion agreements for retail markets will now provide foreign investors with extremely favourable opportunities in Vietnam. This move should impact the retail market in a positive manner, according to property experts. This is especially true for larger cities such as Hanoi and Ho Chi Minh. However, the shortage of retail property hinders market development in terms of leasing price and space.

This means that there’s a tough competition among retailers to grab profitable sites.

According to international property consultants CB Richard Ellis (CBRE), during the last quarter of 2009, there were no retail property projects launched but franchise deals were very hot. High ranking international brands have taken up the last available spaces for shopping centres downtown and meanwhile, many chain restaurants have opened branches as well.

It is expected that leasing prices will go up slightly due to an increase in the demand of luxury brands at the beginning of 2010.

Location, designing, arrangement and diversification of tenants are the key factors to a developing market, according to Nathan Cumberlidge, Director of the Researching & Evaluation Department of Colliers International Vietnam. “A successful retail centre needs to include stores, a cinema, supermarkets and an entertainment area,” added Nathan Cumberlidge.

Most retail centres in Vietnam contain only stores, thus it’s necessary to change their scales, locations, and design in order to adapt to a new consumption trend with an aim of bringing customers a better shopping experience, said Mark Farquhar, Manager of Retail Services, Savills Vietnam. In the next 3 years, multistory shopping centres located in the outskirts of cities will become shopping malls in Vietnam.

The future shopping malls will have entertainment centres, food courts and the biggest shops. By 2012, there will be another 500,000 square meters of retailing space on the market.

Obviously, with the rapid growth of the retail market, there’s no reason to worry about whether or not there will be more investors and retailers eying the market.

For more articles about the Vientnam Real Estate Industry, visit Vietnam Real Estate Market News here.

(Source: Vietnam Real Estate Market News)